Between growing geopolitical uncertainty and inflation somewhat stickier than expected, it’s no surprise that the second half of last week wasn’t great for risk-on assets. The headline CPI came in on Thursday at 3.7%, which is just 0.1% above estimates, but still enough for the fear of more hawkish Fed policy to make an impact. The next FOMC isn’t until November 1, but there will be multiple statements by Fed members before then—I don’t suggest that tuning in to all of them is the best use of your time, but simply keep in mind that they could cause some downside on stocks.

As for Bitcoin, before we get into the TA, you’ve probably noticed a pretty impressive and unexpected green candle today. As always, it’s never a good idea to get too excited about another retest of resistance, but some people think this could be insider trading due to potential developments in the spot ETF race. It’s worth noting that the SEC hasn’t appealed the ruling that ordered them to revisit the Grayscale application, as the deadline for an appeal expired on Friday, but that still doesn’t mean that GBTC will get instantly converted into an ETF. The SEC can still find ways to delay this process and, while it’s more or less inevitable that they will ultimately have to give in, there’s no telling exactly how long this process will last.

So, whenever there’s a candle like that, keep in mind one thing: it could be that someone with a lot of money knows something, but it could also simply be that someone with a lot of money is being a degen. 

Bitcoin

Bitcoin finds a new range between $27,000 and $28,000.

As mentioned in the previous newsletter, a long-legged Doji was printed, which is typically an indicator of indecision between bulls and bears. However, it seems that the weekly close below $28,100 caused some derisking and the level at $26,800 was tested. At the time of writing, Bitcoin is right under the $28k resistance once again. A confirmed breakout would set a path towards the $30k level, while rejection would mean we are revisiting $26,800 and possibly further down.

Looking at the bigger picture, even though we made some lower highs, we’re still maintaining the uptrend structure given that the higher lows haven’t been lost yet.

SPX, Gold and DXY

S&P 500

Gold

U.S. Dollar Index

SPX broke above $4300 after barely defending the uptrend line.

Given the recent inflation data coming higher than expected, most traders thought the trendline will be lost, yet we ended up holding the breakout above the important $4300 level. The trading week was closed right above the level, so it should be fun to watch markets open today. 

The S&P 500 is at a level that MUST hold if we even want to think about continuation.  The uptrend line is closing in on $4300 so we should see the direction sooner rather than later.

Gold is on a roll.

While many have written Gold off after the infamous $1916 level was lost, after a few weeks, it has reclaimed it. We’ve seen almost a 7% increase since $1810 was tested and it pumped straight into the downtrend line as geopolitics made investors flock to safe haven assets once again. In any case, this is another interesting chart to observe as markets open today.

The U.S. Dollar Index almost reclaimed the highs after a small retrace

DXY retraced to the March highs only to quickly bounce and go for the recent highs. This is an important week for DXY, if it fails to reclaim the highs we could see a staircase pattern to the downside, which is something every bull wants to see.

Ethereum

Ethereum/USDT

The Ether bleed continues.

The $1591 level is already nonexistent and a series of lower lows were printed which makes me believe that the 2018 all time high level will be reached soon and my bids are ready. The ETF narrative couldn’t change the trend and, unless Bitcoin takes off, I don’t see Ethereum being interesting anytime soon.

The volumes are dropping as well which shows that interest for trading ETH has been dropping since April. Ether is also a great indicator for alts in general, and we won’t see much gains from them until the structure on ETH becomes bullish.

To look at the bigger picture, unlike Bitcoin, Ether has already lost its bullish structure with a series of new lows that were printed after the last higher low in June. So as long as we don’t see higher highs forming, I am staying bearish on ETH.

Blood’s content recap

A Reminder

“Engagement on crypto profiles has been dropping for some time now.

People are leaving, most probably at a Loss.

Search term #Bitcoin on google is at the lows in the past year.

Most of us aren’t here for likes, but this tells me something.

Institutions are here to get as much money as possible and they get it when Retail looses.

You quitting/selling at a Loss, is exactly what they want.”

Concluding notes

The hottest story in crypto is still the SBF trial, especially as Caroline Ellison took the stand to testify last week. We’re learning a lot about just how scammy the whole operation was, but somehow it seems that it’s hard for anything about Sam to be surprising at this point. While some people that have nothing to do with crypto have attempted to portray him as a naive but well-meaning nerd, those from within the industry have a decidedly different view. Given all we know about how deceptive Sam and his clique were in the final days of FTX, is it really that surprising to hear that they tried to bribe Chinese officials with $100m of customer funds after attempting to withdraw their money from exchanges by using KYC data from Thai prostitutes?

This kind of stuff is impossible to make up, but I don’t think many people are that shocked to learn the bizarre details. At this point, the one crucial aspect of the trial that is still undecided is whether Sam himself will testify: if he does, maybe he’ll try to take someone else down with him—it’s not like he’s got much to lose at this point. We’ll find out if that will happen very soon, since it depends on whether the court will allow Sam to get an additional dose of Adderall; apparently, his lawyers said his current dose isn’t enough for him to concentrate properly.